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How Do We Solve the Venezuelan Crisis?

The internal and international scenarios play an important role in arriving at a solution. The nature of the crisis is as much economic as it is political. Thus, while thinking of solutions, it is important to keep various aspects in mind. There is no quick solution to this crisis.

President Maduro has been consolidating power in Venezuela. Politically, the opposition has also grown weaker and is fractured. In 2015, the opposition had a huge victory in the legislative elections. However, various political manoeuvres prevented this win from translating into any tangible change. As the opposition boycotted various elections in 2017 and 2018, President Maduro has been able to consolidate power. Apart from a common platform of uniting against the incumbent government, there is very little common ground holding the opposition together. With the political opposition weakening, many are calling on the military to intervene. There have been two known military attempts to overthrow President Maduro and put him on trial. These plans were foiled with arrests of those involved. In September, news broke out about a possible US backed coup where President Maduro accused US authorities of plotting a coup with ‘rebellious’ military officers. Apart from this, there has been no indication that the military will get involved in any larger capacity.

Force has been a tool that has been used by the government. The UN Human Rights Commission and certain members have come out making statements on the human rights violations in Venezuela. One of the UNHRC reports highlighted that the rule of law is “virtually absent”. Member nations such as Peru have voiced concerns over “extrajudicial killings, excessive use of force, arbitrary arrests, torture and ill-treatment and the lack of access to justice” in the country. With an incredible intelligence apparatus keeping a check on rebellions, the number of conspirators have dwindled. They have had to resort to unconventional tactics such as using drones to attack the President. This happened in August this year. Thus, there are pressures indicating a peaceful resolution while some indicate otherwise.

At the international level, the dynamics seem to be more complex. Only 16 countries are said to have recognized President Maduro’s 2018 election victory with over 50 countries declaring the result ‘illegitimate’. With the President’s next term beginning in January 2019, the international scenario then will determine foreign policy and external relations.

The international community has tried to intervene in various capacities limited to diplomatic pressure. Many international mediators have unsuccessfully attempted to negotiate a resolution to this crisis. There has also been pressure from the Lima Group, multilateral body with representatives of 17 countries to establish a peaceful resolution to the Venezuelan crisis. Countries such as the US, Canada and Switzerland with the EU have imposed economic sanctions on the regime. While there has been a discussion considering US military intervention, the diplomatic blowback and economic implications post action have deterred further discussions of this option. Experiences from Iraq have had a strong impact on US foreign policy and its stance on military intervention. Efforts in the UN Security Council have been slow anticipating opposition from Russia as well as China. The two countries have also been able to deter UN sanctions. President Maduro shares good ties with key countries such as Bolivia and Nicaragua that have helped in regional blocs.

From the international and domestic scenario, it is evident that the solution for this crisis lies with the willingness and intent of President Maduro and the government. From an economic perspective, reforms are key to resolving the crisis. It is important to undertake serious reforms to restore investor confidence in Venezuela. This would require strengthening of the central bank as well as reforms to make business easier in Venezuela. Price stabilization should be the first focus area. As one of the major reasons for the rise in prices is the scarcity induced by import restriction, it is important to remove import constraints. The Maduro government has been opposed to accepting foreign aid for various reasons spanning from optics and internal politics to possible international dynamics. Earlier this year, over 50 countries urged Venezuela ‘to restore the rule of law’ and allow humanitarian assistance.

In order to have enough forex from preventing a forex crisis, cooperation with the international community and transnational bodies such as the IMF is a necessity. With the currency having lost much of its value, transitioning to another currency and ensuring stability will have to be considered. Capital controls, most definitely, will have to be reconsidered. The reforms that are in order may fundamentally be opposed to the ideological basis on which policies have been made in the past few decades. However, they are the need of the hour in order to ensure the humanitarian crisis doesn’t worsen and not just ‘normalcy’ is restored, but people are able to thrive going forward.